QUESTION
We are a lender with a home office in the state of Virginia. We had thought that anyone could record a conversation with a borrower without notice or consent at any point in time. Recently, we heard that there are laws, either state or Federal, that do speak to this sort of thing.
There was an incident where one of our loan officers recorded a borrower call unbeknownst to the borrower, a call that became somewhat unfavorable in nature, containing some harsh language, and now we are concerned that we may have done something that we should not have done.
Do you have any basic information that might help us, particularly referencing the state of Virginia, where we are located?
ANSWER
Although you did not state which party may have used the “harsh language,” we would always caution anyone on staff in your own organization to use the utmost care and respect when conversing with any actual or potential borrower. There are many laws, both state and Federal, that prohibit the use of certain language or the use of language that could be construed by a borrower or applicant as “threatening” or “abusive.”
Thinking in broadest terms regarding the recording of calls, there are state-specific laws that apply here, states being where the majority of such laws apply. There are also some Federal laws, regulations, and rules that can apply too.
With the understanding that the majority of governing laws are state-specific for recording calls, many states have what is known as a “One Party Consent Law,” which means that if one party consents to the recording of the conversation, it is permissible. So, if the borrower was a party to the conversation, he or she can record the conversation without the loan officer’s consent, and the opposite is true as well.
Other states have what is known as a “Two Party Consent Law,” in which all parties must be made aware of and consent to the call recording. An exception to this law is generally where there is no expectation of privacy, such as in a restaurant or a store.
Some examples of Federal laws, regulations, and rules that would be applicable have more to do with the content of the conversation within the recorded calls, ensuring that there are no violations of certain regulations, rules, and Acts, such as:
- Graham-Leach-Bliley Act (GLBA);
- Unfair, Deceptive, or Abusive Acts or Practices (UDAAP);
- Fair Lending rules and the Equal Credit Opportunity “ECOA,” or the Unfair, Deceptive Treatment & Practices Act “UDTPA” (i.e., anything that may be construed as potentially discriminatory in nature or disparate treatment to a consumer).
In speaking specifically to the state in question, which is Virginia, there is guidance found within the state itself. Under Virginia law, an individual who is a party to either an in-person conversation or electronic communication, or an individual who has the consent of one of the parties to the communication, can lawfully record it or disclose its contents. Please see the guidance below:
In a section of the Code of Virginia, entitled “Interception, disclosure, etc., of wire, electronic or oral communications unlawful; penalties; exceptions,” the following requirements are set forth:
A. Except as otherwise specifically provided in this chapter any person who:
1. Intentionally intercepts, endeavors to intercept or procures any other person to intercept or endeavor to intercept, any wire, electronic or oral communication;
2. Intentionally uses, endeavors to use, or procures any other person to use or endeavor to use any electronic, mechanical or other device to intercept any oral communication;
3. Intentionally discloses, or endeavors to disclose, to any other person the contents of any wire, electronic or oral communication knowing or having reason to know that the information was obtained through the interception of a wire, electronic or oral communication; or
4. Intentionally uses, or endeavors to use, the contents of any wire, electronic or oral communication, knowing or having reason to know that the information was obtained through the interception of a wire, electronic or oral communication; shall be guilty of a Class 6 felony.
[Code of Virginia, Title 19.2. Criminal Procedure, Chapter 6. Interception of Wire, Electronic or Oral Communications, § 19.2-62, A.1-4.]
Note, also, that the subject section states:
It shall not be a criminal offense under this chapter for a person to intercept a wire, electronic or oral communication, where such person is a party to the communication or one of the parties to the communication has given prior consent to such interception. [§ 19.2-62. Interception, disclosure, etc., of wire, electronic or oral communications unlawful; penalties; exceptions. B.2. Emphasis added.]
Michelle Leigh
Director/Internal Audits and Controls
Lenders Compliance Group
Executive Director/Servicers Compliance Group
